Illegal gambling across the US grows faster than the legal sector

There are many benefits the legal gambling sector offers. Across the United States, large-scale hotel and casino resorts provide employment opportunities for thousands of workers.

Employment in the sector extends beyond dealers and cashiers as hotel casinos have luxury restaurants, various entertainment options and amenities.

As a result, casino resorts create well-paid positions in food and beverage, housekeeping and various other roles related to the maintenance of such properties.

Besides creating workplaces, the gambling sector provides a legal way for people to enjoy the activity, while at the same time generating tax revenue.

There are 1011 commercial and tribal casinos across the United States, according to data from the American Gaming Association (AGA), the gambling sector's premier national trade group.

Per AGA's data, the economic impact of the commercial and tribal gambling sector is a whopping $328.6bn. At the same time, the sector supports 1.8m jobs.

The statewide expansion of betting brings benefits

In addition to casino gambling, sports betting is also widely spread across the US. Some 38 states along with Washington DC currently offer some form of sports betting, while an overwhelming majority provide options for retail and mobile wagering.

Lawmakers in a dozen states are yet to legalize the activity or are in the process of doing so. With that in mind, the economic impact of the US betting sector is immense.

Besides generating tax revenue, legal betting provides a range of sponsorship opportunities for professional and collegiate sports teams.

The legal betting sector also plays a key role by providing bettors options to enjoy the activity legally.

While most states offer plenty of betting options, the black market remains an issue across the US.

The gambling sector creates jobs

Across the US, if sports betting isn't legal in a particular state, bettors may engage in the activity via unlicensed, offshore operators.

With that in mind, black market operators tend to lure their customers with better odds and promises for different incentives.

However, this doesn't mean that gamblers who use the black market have any guarantees for collecting their winnings.

Back in mid-May, AGA released its latest State of the States 2024 report, highlighting insights about the commercial gambling sector in 2023.

In the recent report, AGA's President and CEO, Bill Miller, acknowledged the expansion of gaming that helps create different opportunities for communities across the nation.

Miller added: "We are proud to create jobs across the country, provide world-class entertainment experiences that offer safe alternatives to the pervasive illegal gambling market, and generate tax revenue to support critical public projects."

Tens of billions are lost to illegal betting, iGaming

The same State of the States report uncovered that the commercial gaming revenue soared to $66.66bn in 2023. When compared to 2022, the increase in commercial gaming revenue is notable or 10.3% year-over-year to be precise.

A breakdown showed the online gambling market in 2023 reported $6.17bn in revenue. The result marked a 28.2% year-over-year increase. Still, it's important to note that only six US states currently offer legal iGaming activities, not counting Nevada where only online poker is available.

Despite the growth of iGaming revenue, the black market continues to present a significant challenge, another report reveals.

Near the end of May, the Campaign for Fairer Gambling (CFG), together with Yield Sec, disclosed details regarding the share of the online gambling black market.

Per the report, the illegal online gambling industry in three US states benefitted from nearly $10bn in revenue. According to the experts' report, Minnesota, New York and New Jersey lost approximately $9.5bn to illegal gambling.

The recent report provided a breakdown of the share of revenue for each of the states. Not unexpectedly, New York, where only mobile sports betting is legal, reported losses to illegal iGaming and betting of $5.3bn. This was the highest revenue lost to illegal gambling out of all three states.

The illegal online gambling and betting sector in Minnesota was also substantial. The recently released report revealed that more than $2.4bn in revenue is lost to illegal iGaming and betting activities across the state.

In New Jersey, the revenue from illegal gambling activities was also closer to $2bn. The report estimated that the state loses $1.71bn to illegal betting and online gambling.

The share of the black market is significant

The substantial losses to the illegal online gambling sector, evaluated at $9.5bn for three states reaffirms the need for stricter regulations and proactive monitoring.

Considering AGA's report which estimated the iGaming revenue for 2023 at nearly $67bn, the $9.5bn figure highlighted in CFG and Yield Sec's report should undoubtedly sound the alarm to lawmakers.

While there are active efforts in different states toward the legalization of online gambling, the recent data shows that even in markets such as New Jersey, where iGaming is permitted, the share of the black market in both iGaming and betting is significant.

After all, a legal online gambling sector plays a crucial role by providing customers with access to fair gambling services.

At the same time, as noted, the activity generates tax revenue, while licensed operators are required to comply with duty of care and regulations established to prevent financial crimes such as money laundering.

All those regulations ultimately help protect the customers from problem gambling and harm, while enhancing the overall trust in the gambling sector.

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